Mastercard Azione Forum

Mastercard Q3 2024 $MA (+0,88%)

Financial performance:

Mastercard's financial results for the third quarter of 2024 show a solid performance: Net revenue increased 13% to USD 7.4 billion, up 14% at constant currency. Adjusted net income grew 12% to USD 3.6 billion and adjusted diluted earnings per share (EPS) increased 15% to USD 3.89. Operating costs increased by 25 % due to restructuring costs and provisions for litigation. The operating margin therefore fell to 54.3 %, compared with 58.8 % in the previous year.

Balance sheet overview:

As of September 30, 2024, Mastercard's total assets were USD 47.2 billion, an increase from USD 42.4 billion at the end of 2023. Current assets increased to USD 22.3 billion, including cash and cash equivalents of USD 11.1 billion. Total liabilities amounted to USD 39.7 billion, including non-current liabilities of USD 17.6 billion. Shareholders' equity amounted to USD 7.5 billion.

Revenue overview:

The main sources of income include revenues from the payment network and value-added services, with the latter recording an increase of 18%. The main cost drivers were general and administrative expenses, advertising and marketing and depreciation and amortization. The adjusted operating margin was 59.3 %.

Overview of cash flows:

For the nine months ended September 30, 2024, Mastercard generated $9.9 billion in net cash from operating activities, compared to $7.9 billion in the prior year. Investing activities used USD 724 million, mainly for the acquisition of securities and real estate. Financing activities used USD 6.8 billion, mainly for the repurchase of treasury shares and dividend payments.

dividend payments.

Key criteria and profitability ratios:

Adjusted effective tax rate increased to 16.3%, compared to 15.0% in the prior year. The operating margin decreased by 4.5 percentage points to 54.3%.

Segment information:

The payment network recorded growth in gross dollar volume (GDV) of 10% (adjusted for local currency), with cross-border volume increasing by 17%. The number of switched transactions increased by 11%.

Competitive position:

Mastercard continues to strengthen its market position through strategic acquisitions such as Recorded Future and Minna Technologies to expand its capabilities in AI-powered threat analytics and subscription management.

Management guidance and comments:

Management remains optimistic about future growth and is focused on expanding the addressable market and improving value-added services. The company expects continued demand for its services and solutions.

Risks and opportunities:

The main risks include regulatory challenges, competition and technological changes. Opportunities lie in the expansion of digital payment solutions and the use of AI technologies.

Summary of results:

Mastercard's financial performance in Q3 2024 reflects strong growth and strategic investments and positions the company well for future expansion. The increase in net revenue as well as the strategic acquisitions underline the focus on expanding the service offering and market penetration. Despite increased operating costs, the company remains financially robust and has significant growth potential.

Positive aspects:

• Revenue growth: Mastercard reported a 13% increase in net sales to USD 7.4 billion, up 14% at constant currency, supported by growth in the payment network and value-added services.
• Value-added services: The value-added services and solutions business achieved significant revenue growth of 18%, or 19% at constant currency, indicating strong demand and successful scaling of services.
• Cross-border volume: Cross-border transaction volume increased by 17% (local currency adjusted), reflecting strong international transaction activity.
• Strategic acquisitions: The planned acquisitions of Recorded Future and Minna Technologies are expected to strengthen Mastercard's capabilities in AI-powered threat intelligence and subscription management and position the company for future growth.
• Cash flow from operating activities: Net cash provided by operating activities increased to USD 9.9 billion in the first nine months of 2024, compared to USD 7.9 billion in the prior year, demonstrating strong cash generation.

Negative aspects:

• Operating costs: Operating costs increased by 25%, primarily due to higher general and administrative expenses, including restructuring costs and litigation provisions, which weighed on profitability.
• Operating margin decline: The operating margin fell by 4.5 percentage points to 54.3%, reflecting the increase in costs.
• Litigation and restructuring costs: Significant provisions for litigation and restructuring expenses contributed to the increase in operating costs.
• Interest expenses: Increased interest costs in connection with the debt portfolio had a negative impact on other comprehensive income, although positive income was generated from investments.
• Increase in the effective tax rate: The adjusted effective tax rate rose from 15.0% to 16.3%, which could impact net profit growth.

Another great picture of Quartr

$MA (+0,88%)
$V (+1,22%)
$JPM (+0,97%)
$BAC (+1,3%)
$GOOGL (-0,6%)
$AAPL (+0,65%)

💳 The card game of the giants: Visa, Amex, Mastercard - Who will win the payment poker game? 🃏

For the development (company figures), a better view and more, check out the free blog: https://topicswithhead.beehiiv.com/p/das-kartenspiel-der-giganten-visa-amex-mastercard-wer-sticht-im-zahlungspoker

Company Portraits

$V (+1,22%) was founded in 1958 and is headquartered in San Francisco, California. The company operates one of the largest electronic payment networks in the world and is best known for its credit, debit and prepaid cards.

$MA (+0,88%) The company was founded in 1966, is headquartered in New York and is one of the leading global payment providers alongside Visa. It enables payments with debit, credit and prepaid cards via its own network.

$AXP (+0,52%) (Amex), founded in 1850, is a renowned financial services provider headquartered in New York. In addition to payment cards, Amex also offers extensive travel services and is known for its exclusive products, which appeal primarily to affluent customers.

Historical development

Visa emerged from the BankAmericard, a credit card originally issued by the $BAC (+1,3%) was issued. The company was renamed Visa in 1976. The company has been listed on the stock exchange since its IPO in 2008.

Mastercard was created in response to the success of BankAmericard. It was originally a merger of regional bank card networks. The company was listed on the New York Stock Exchange in 2006.

American Express began as an express delivery service and later expanded its offering to include financial and travel services. In 1958, the company introduced its first store card and has since developed a range of exclusive card products, including the famous Centurion card, which was launched in 1999.

Business model

Visa and Mastercard operate as pure payment networks that facilitate transactions between banks, merchants and cardholders. They charge fees for each transaction, but do not bear any credit risk.

American Express acts as both a payment network and a card issuer. As a result, Amex benefits not only from transaction fees, but also from annual fees and interest on outstanding balances. Unlike Visa and Mastercard, Amex bears the credit risk of its cards.

Core competencies and future prospects

Visa and Mastercard stand out for their global reach, technological innovation and strong brand presence. Both companies are investing heavily in digital payment technologies and security systems to consolidate their market position.

American Express, on the other hand, is focusing on its particular strength in the premium segment, with first-class customer service and an attractive bonus program. Amex is also increasingly investing in digital solutions and expanding its offering for business customers.

Strategic initiatives

1. expansion of its presence in emerging markets

2. further development of innovative payment technologies such as contactless payment and blockchain

3. cooperation with fintech companies

4. strengthening cyber security

Market position and competition

Visa leads the market as the largest global payment network, followed by Mastercard. Together, these two companies dominate the market for payment networks.

American Express holds a strong position in the premium segment, but faces challenges, particularly due to the comparatively lower acceptance among merchants, which is attributable to Amex's higher fees.

All three providers are facing increasing competition from new digital payment services such as PayPal, Apple Pay and innovative fintech start-ups.

Total Addressable Market (TAM)

The market for digital payments is growing steadily. Ongoing digitalization and the global trend towards cashless transactions offer Visa, Mastercard and American Express considerable growth potential, particularly in emerging markets, making it almost the global payment market.

Share performance

Over the past few years, all three companies have shown impressive stock performance, with Visa and Mastercard generally outperforming American Express. Visa TR over 10 years is 454%, Mastercard TR over 10 years is 612% and Amex is at a 10 year TR of 259%.

For the performance (company numbers), better view and more check out the free blog: https://topicswithhead.beehiiv.com/p/das-kartenspiel-der-giganten-visa-amex-mastercard-wer-sticht-im-zahlungspoker

Conclusion

With Mastercard and Visa, there is actually a duopoly in the market, which is why it is difficult to choose between the two. In terms of performance, Mastercard has done better, but is also more highly valued. If you can get hold of the shares at a good price, you should go for it; there is not much more you can say.

The situation with American Express is more complex. Although Amex has a network, the company operates somewhat differently and has different risks. Things are going well at the moment, but we have also seen less good times in the past. I therefore consider Amex to be an interesting investment, but less so for me personally. Amex seems too much like a bank in payment transactions, and there are other options that are more attractive to me. There would be $AFRM (-2,83%) Paypal, Klarna or Co would be more interesting.

Despite the loss on the $MA (+0,88%) trade, more than satisfactory with the KO bills.

In addition $AFX (-2,96%) which seems to have finally bottomed out.

Depot review September 2024 - The first green September in my depot since 2019 📈

September is generally regarded as the worst month on the stock market, with a negative monthly performance more than 50% of the time. This is also consistent with my experience since 2013. In 11 years, it has been negative 6 times and positive 5 times. From 2020 to 2023, the last 4 years were all negative. However, September 2024 is now the first positive September since 2019, which means it is exactly 50/50 for me - 6 positive and 6 negative Septembers since 2013.

The Fed's interest rate turnaround and the stimulus in China have certainly contributed to the positive trend

Monthly view:

In total, September was +1,2%. This corresponds to price gains of ~3.600€.

The MSCI World (benchmark) was +1.0% and the S&P500 +1.3%

Winners & losers:

A look at the winners and losers is particularly exciting this month.

On the winning side at the very top are my China ETF with € +1,300 and is thus back in the green for the first time in a long time. The following winners are also a colorful mix with Meta, Bitcoin, Home Depot and Sea. Really a very broad mix with no clear tendency towards regions, sectors or the like

On the loser side in my portfolio in September were mainly pharmaceutical stocks. Novo Nordisk, Amgen and Johnson & Johnson. Even worse, with price losses of ~€700 each, were only Palo Alto Networks and ASML.

The performance-neutral movements in September were just under €4,500. The premium refund from my private health insurance also played a large part in this. In September, I received over €2,000 back for the year 2023, which was of course invested directly to compensate for any higher pension contributions.

Current year:

My performance in the current year is +20,4% and thus above my benchmark, the MSCI World with 17.2%.

In total, my portfolio currently stands at ~321.000€. This corresponds to an absolute growth of ~€69,000 in the current year 2023. ~49.000€ of this comes from price increases, ~2.800€ from dividends / interest and ~17.000€ from additional investments.

Dividend:

• Dividends in September were 23% above the previous year at ~€360
• Amgen is in the lead with a (gross) dividend of €50 every 3 months. But Johnson & Johnson with €45 is also a delight
• In the current year, the dividends after 9 months are +25% over the first 9 months of 2023 at ~2.210€

Buys & sells:

• I bought in September for approx. 3,500€. 2,100 of this came from the premium refund from my private health insurance and went into the WisdomTree Global Quality Dividend Growth
• As always, my savings plans were executed:
• Blue ChipsLockheed Martin $LMT (+3,53%) Republic Services $RSG (+2,48%) Thermo Fisher $TMO (+0,08%) ASML $ASML (-0,38%) MasterCard $MA (+0,88%) Deere $DE (-2,8%) Northrop Grumman $NOC (+1,36%) Itochu $8001 (+0,85%) Salesforce $CRM (+4,64%) Hermes $RMS (-3,64%) Constellation Software $CSU (-0,43%)
• 
  Growth: -
• ETFsMSCI World $XDWD (+0,78%) Nikkei 225 $XDJP (-0,35%) and the WisdomTree Global Quality Dividend Growth $GGRP (+0,56%)
• 
  Crypto: Bitcoin $BTC (+0,41%) and Ethereum $ETH (+0,49%)
• 
  Sales there were none in September

Target 2024:

My goal for this year is to reach €300,000 in my portfolio. Due to the extremely positive market development in the current year, my portfolio currently stands at ~€321,000.

At the beginning of September, my portfolio was still quite a bit lower at €304,000 due to the weak start to the month. At this point, it was therefore quite a way off the previous high of €320,000 in June.

I have now reached a new high of €321,000 and am optimistic that I can still beat my year-end target of €300,000.

#dividends

#dividende

#rückblick

#depotupdate

#aktie

#stocks

#etfs

#crypto

#personalstrategy

With $BMY (-0,14%) my losses from the $MA (+0,88%) trade.

Overall a positive week with realized +372€ from KO bills

Companies that I find interesting but do not yet have in my portfolio and that have a 10-year average ROIC of over 10% and a 5-year average ROCE and ROIC of over 10%, $ANET (+0,19%), $MA (+0,88%) , $VRTX (+3,85%) , $RMS (-3,64%) , $PGHN (-0,51%) , $COLO B (+0,18%) , $ACN (-0,5%) , $MNST (+1,28%)
$FICO (+8,02%) , $MCO (+3,79%) , $KNIN (-0,47%) , $S&P Global, $ISRG (+2,71%)
$III (-2,83%) , $BKNG (+1,31%)
$HLAG (-2,26%) , $QCOM (-0,3%) , $CFR (-5,99%) and $IFX (-0,83%) . Already blatant companies

My opinion on the DOJ lawsuit against VISA

The DOJ Visa $V (+1,22%) lawsuit is absolutely laughable.

Visa is clearly not a monopoly, Mastercard $MA (+0,88%) is also still there. If you want, you can add American Express $AXP (+0,52%) can also be included. To apply double standards here is simply extremely unprofessional.

The DOJ is particularly bothered by the "client incentives" and debit cards. The "client incentives" are simply marketing expenses to Visa customers. These do not even serve to exclude others, everywhere you can pay with Visa, Amex, Mastercard and PayPal are also accepted.

The focus here is only on debit cards and not credit cards, in order to develop a narrative that Visa is harming the "poor" here.

In addition, Visa's fees are allegedly partly to blame for inflation. Anyone who has ever looked at quarterly reports from Visa or Mastercard knows that this is absolute bs.

On the one hand, the DOJ claims that Visa charges too high a fee, forcing merchants to permanently raise their prices. On the other hand, it bothers the DOJ that these merchants receive money from Visa.

The fact that merchants choose Visa (also Mastercard and Amex) because the transaction network is extremely secure and a basis of trust is ignored.

The DOJ, which is so concerned about consumers, also doesn't seem to realize that none of these consumers need to use Visa's network in any way. They also ignore the fact that paying with cash also incurs costs (article in the comments).

I really hope the DOJ doesn't start looking for scapegoats for inflation now.

If that is the case, it looks very politically motivated to blame others afterwards, as always, but not those who make the political decisions that were/are a driver of inflation.

$MA (+0,88%) unfortunately ran into the KO.

Learning for me: adjust leverage for stocks that like to open with a downgap.

The strategy was right, but unfortunately it doesn't always work.

Still open:

$AIR (-1,42%) +55%

$RIO (-2,95%) +280%

$BATS (+0,49%) +20%

$CME (+3%) -5%

#auchmaldieverlustezeigen